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APPEAL
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TORTS: DUTY OF CARE, FORESEEABILITY, CAUSATION
Resurfice Corp. v. Hanke (Alta. C.A., November 7, 2005)(31271)
“H, the operator of a ice‑resurfacing machine, was badly burned when hot water overfilled the gasoline tank of the machine, releasing vapourized gasoline which was then ignited by an overhead heater, causing an explosion and fire. H sued the manufacturer and distributor of the machine for damages, alleging that the gasoline and water tanks were similar in appearance and placed close together on the machine, making it easy to confuse the two. The trial judge dismissed the action. He found that H did not establish that the accident was caused by the negligence of the manufacturer or distributor. The Court of Appeal ordered a new trial, concluding that the trial judge had erred in both his foreseeability and causation analyses.”
CRIMINAL LAW: SENTENCING
L.M. sexually assaulted his two‑year‑old daughter. He also took pornographic photographs of his daughter and her young friend and distributed them on the Internet. He was 32 years old and had one similar prior conviction when he was a teenager. The trial judge sentenced L.M. to imprisonment for eight years and eight months on the count of sexual assault, five years on the counts of production and distribution of child pornography and three years on the charge of possession of child pornography. The latter two sentences were concurrent with each other but consecutive to the sentence for sexual assault. The judge also found L.M. to be a long‑term offender for a period of 10 years. The majority of the Court of Appeal allowed L.M.’s appeal, Morin J.A. dissenting.
Her Majesty the Queen v. L.M. (Que. C.A., May 26, 2006)(31577)
CRIMINAL LAW: SENTENCING
The Court of Québec convicted the Respondent of death threats, assault, procuring, possession of a firearm for a dangerous purpose and trafficking in cocaine. At the sentencing hearing the Respondent also pleaded guilty to several counts relating to the making of false documents. In its decision, the Court of Québec referred to many aggravating factors that, in its view, argued in favour of a federal prison term. It considered the sentences imposed in similar cases and the applicable principles, particularly proportionality. With regard to the counts on which the Respondent had been convicted, the court found that a term of imprisonment of 46 months was justified. With regard to the other offences to which the Respondent had pleaded guilty, the court imposed a consecutive sentence of 8 months’ imprisonment. Taking account of the Respondent’s preventive detention, the court then found that the sentence would have to be 18 months, which allowed it to add a three‑year probation period. A motion for leave to appeal the sentence was made to the C.A. , which allowed the motion and allowed the appeal for the sole purpose of setting aside the probation order. In its opinion, (translation) “[t]he trial judge expressly took account of the sum of the sentences imposed in each case to arrive at a total of 54 months, from which he subtracted the time spent in interim detention (18 months x 2 = 36 months), and “[i]n these circumstances, the judge could not add probation under s. 731(1)(b) Cr.C.”
Her Majesty the Queen v. Patrick Mathieu (Que. C.A. , August 7, 2006)(31662)
LABOUR LAW: DUTY TO ACCOMODATE
Hydro-Québec imposed an “administrative dismissal” on Manon Laverrière. In the dismissal letter, Hydro-Québec referred to Ms. Laverrière’s high absenteeism rate since 1994, noted that her absenteeism meant she was unable to perform her work on a regular and reasonable basis and stated that, in the opinion of the medical experts consulted, Ms. Laverrière’s attendance at work would remain problematic and there was no reason to think that it could improve. At the time of her dismissal, Ms. Laverrière had been working for Hydro-Québec for about 24 years as a sales, rates and programs clerk. Her many absences were due to such things as an employment injury, a tense situation with her immediate supervisor; several bouts of depression and two suicide attempts. Between 1994 and 2001, Hydro-Québec authorized several absences, transferred Ms. Laverrière to a new position under another supervisor, abolished the new position and then transferred it to another city and authorized a gradual return to work, but none of these measures were successful. In 2000 and 2001, doctors examined Ms. Laverrière, in some cases at the employer’s request, and found that she had a personality disorder that caused her serious adjustment problems and resulted in depressive episodes and sometimes prolonged absences from work. The grievances arbitrator chosen to dispose of the grievance presented by the Union dismissed the grievance, finding, inter alia , that it could not be concluded from the evidence that the employer had discriminated against or harassed Ms. Laverrière or that it bore any share of responsibility in this case. In the arbitrator’s opinion, it would have been unreasonable to require the employer to create a position that would be constantly adjusted to Ms. Laverrière’s specific characteristics and very uncertain availability. The Superior Court dismissed the application for judicial review. The C.A. reversed.
Hydro‑Québec v. Syndicat des employé‑e‑s de techniques professionnelles et de bureau d’Hydro‑Québec, Local 2000 (CUPE‑FTQ) (Que. C.A., February 7, 2006)(31395) "with costs to the Applicant in any event of the cause."
BANKRUPTCY: ARE FISHING LICENCES “PROPERTY”
Mr Saulnier, who held four fishing licences granted by the Minister of Fisheries and Oceans, owned Bingo Queen Fisheries Limited. The Royal Bank held a security agreement, made pursuant to the Nova Scotia Personal Property Security Act (PPSA), which addressed “security over all present and after acquired personal property including ... intangibles ... and in all proceeds and renewals thereof ...”. In July 2004, the bank demanded payment of Mr Saulnier and Bingo for amounts due and gave notice of its intention to enforce its security. It appointed WBLI Inc. as receiver, further to the security agreement. Mr Saulnier made an assignment in bankruptcy. In November 2004, he signed a “Lease and Royalty Agreement” with a corporation whose principal was his common law spouse, to which he granted the use and benefit of his lobster licence. The Royal Bank and the Receiver applied to the N.S.S.C. for a declaration that Mr Saulnier’s fishing licences are “personal property” in the form of an intangible pursuant to the PPSA, and are “property”, for the purposes of the Bankruptcy and Insolvency Act (BIA), which a receiver or trustee can require a bankrupt to transfer. The N.S.S.C. granted the declaration and found that the fishing licences were property under the BIA and personal property under the PPSA. The N.S.C.A. allowed the appeal only to specify that it was the rights respecting fishing licences that constituted property, here, the right to apply for renewal of the licence or reissuance to a designate, coupled with the right to resist an arbitrary denial.
Benoit Joseph Saulnier and Bingo Queen Fisheries Limited v. Royal Bank of Canada, et al. (N.S. C.A., July 25, 2006)(31622) "with costs to the Applicants in any event of the cause."
TORTS: VICARIOUS LIABILITY
Brenda Hohn was killed when her car was hit by a stolen vehicle driven by T.B., then 14 years old. The stolen vehicle had been pursued by Constable McBryan of the R.C.M.P. Ms. Hohn’s family brought an action for compensation under the B.C. Family Compensation Act. Following a summary trial to determine who was at fault, it was found that T.B. was 90 per cent at fault and Constable McBryan 10 per cent at fault. The B.C. Police Act provided that “no action for damages lies against a police officer” for negligence in the performance of his duty. Section 11(1) of the Police Act made the Attorney General of British Columbia (“AGBC”) “jointly and severally liable for torts committed by provincial constables” in the performance of their duties. Thus, the AGBC was vicariously liable for the fault of Constable McBryan. Under Article 10.7(a) of the Provincial Police Service Agreement between the Province of British Columbia and the Government of Canada, Canada undertook to indemnify the Province with respect to any claims or actions in which the Province may be or may become liable, where a police officer received the benefit of a statutory defence under the Police Act. The Federal Government assumes conduct of any proceedings relating to such claim. The Insurance Corporation of British Columbia (“ICBC”) informed the AGBC that it did not intend to pay any portion of the family’s damages. The R.C.M.P. pursuant to its obligation under the Agreement paid the family 10 per cent of the damages. The AGBC brought a third party claim against ICBC. T.B. did not have a driver’s licence and was not insured. He was unable to pay his 90 per cent share of the damages. The family then applied to ICBC for payment of the 90 per cent under the “uninsured motorist provisions” found in s. 20 of the B.C. Insurance (Motor Vehicle) Act and the “underinsured motorist provisions” found in s. 148.1 of the Revised Regulation (1984) Under the Insurance (Motor Vehicle) Act . ICBC refused to pay any portion of the damages. The AGBC and ICBC sought the opinion of the B.C.S.C. on five questions concerning ICBC’s liability to pay any portion of the damages. The chambers judge determined that the AGBC was jointly and severally liable with T.B. for 100 per cent of the damages under s. 4 of the Negligence Act . The chambers judge also concluded that ICBC was required to pay a portion of the 90 per cent of the damages for which T.B. was found liable. The AGBC appealed and the ICBC cross-appealed. After the chambers judge made her orders, the AGBC paid the family the 90 per cent of the damages and took an assignment from them of their rights against ICBC. The B.C.C.A. upheld the chambers judge’s decision with respect to joint and several liability, and allowed the cross-appeal holding that the AGBC was not entitled to contribution from ICBC. The AGBC then unsuccessfully applied for a rehearing of the appeal. The B.C.S.C.: awarded the plaintiffs for loss of support, services, care, guidance and affection, and loss of inheritance; held that the Applicant is subject to the provisions of s. 4(2)(a) of the Negligence Act; required the Respondent to pay a portion of the damages awarded against T.B. The B.C.C.A. dismissed the appeal and allowed the cross-appeal.
Attorney General of British Columbia v. Insurance Corporation of British Columbia (B.C.C.A., April 26, 2006)(31515) " The applications for an extension of time are granted. The application for leave to appeal...is granted with costs to the Applicant in any event of the cause."
TORTS: DAMAGES
While imprisoned at 18 years of age for a crime committed to support a cocaine addiction, the Applicant was sexually abused twice by a classification officer employed at his correctional institution. He did not disclose the abuse. After his release, the accused became a heroin addict and a repeat offender. He spent 12 of the next 15 years in prison for a variety of offences. The Applicant disclosed the past abuses after learning of an investigation into abuse at the correctional centre. The correctional officer was convicted of sexual assaults against the Applicant. The Applicant brought an action for damages and the Crown admitted liability. The Crown denied that all of the applicant’s alleged difficulties were caused by the assaults. The Crown was ordered to pay general and aggravated damages of $60,000, $15,000 for future counselling, $150,000 for past wage loss and $50,000 for future income loss. The B.C.C.A. allowed the appeal against the awards for past wage loss and future income lost in part: past wage lost reduced to $90,000; loss of future income reduced to $35,000.
Her Majesty the Queen in Right of the Province of British Columbia v. Dean Richard Zastowny (B.C.C.A., May 8, 2006)(31552) "The application for leave to appeal...is granted without costs and the application for leave to cross-appeal is granted with costs."
FAMILY LAW: CUSTODY, ACCESS
The Respondent mother moved from Medicine Hat to the Calgary area, taking her two daughters with her (one daughter, S born in 1997 and the other, V, born in 2001.) The leave application is by the father of V and concerns the custody order with respect to her. The trial judge ordered that the Applicant father should have primary care and control of the child. The mother appealed and her appeal was allowed. The trial judge's order was set aside, and the C.A. ordered the parties to share joint custody, with day‑to‑day care and control to be exercised by the mother. Issues here include the following: what weight, if any, can or should courts in Canada, give to reasons a spouse gives for wanting to move from one area of the country to another; what is the role of psychologists in custody disputes; what weight can or should be attributed to expert reports and testimony in determining the best interests of children; to what extent can or should their reports and testimony be challenged on the basis of lack of independence; what is the proper role of trial courts and courts of appeal in Canada.
Calvin James MacPhail v. Marcie Marie Karasek (Alta. C.A., August 11, 2006)(31629) "with costs."
ABORIGINAL LAW: WILL-SAY STATEMENTS, EXPERT REPORTS
Pursuant to a Court Order, the Applicants filed will-say statements disclosing the nature of the witnesses intended to be called in upcoming trials. The Crown brought two pre-trial motions, seeking to strike a large number of will-say statements and some expert reports filed by the Applicants. Although some witnesses were to be excluded on the basis of non-compliance with court orders, the main issue became whether the evidence relating to a general right to self-government was relevant to the action. Did the Federal C.A. properly uphold the Orders of the Federal Court Trial Division excluding certain witnesses and expert reports as irrelevant.
Sawridge Band v. Her Majesty the Queen ‑ and ‑ Tsuu T’ina First Nation v. Her Majesty the Queen (Fed. C.A., June 19, 2006)(31609) "with costs."
CRIMINAL LAW: COSTS
Police in B.C. seized items belonging to the Respondent while executing a search warrant. The Respondent was not a target of the warrant nor charged with an offence. The B.C.S.C. reviewed the warrant and ordered the return of the seized items. Before the order was settled, a police officer wrongly decided that a confidentiality agreement between counsel governing the use of the seized materials had expired. He provided the Ontario Provincial Police with details of the information seized from the Respondent. The Ontario police obtained a warrant in Ontario to seize the Respondent’s items without disclosing the existence in B.C. of a confidentiality agreement between counsel and a claim of solicitor‑client privilege. The Information in support of the application for the warrant wrongly indicated that the B.C. court had upheld the validity of the search as it related to the Respondent’s items. The B.C.S.C. was advised of the Ontario proceedings and directed Crown counsel in B.C. to direct Crown counsel in Ontario to advise authorities in Ontario that the Ontario search warrant was fundamentally flawed. B.C.'s Crown counsel advised Ontario’s Crown counsel as directed and requested a return of the seized items but Ontario’s Crown counsel refused to return the items. The Respondent commenced certiorari proceedings to challenge the Ontario warrant and the seizure of his property. Crown counsel opposed the application. The Motions Judge granted the application for certiorari, quashed the search warrant and ordered the return of the items. The C.A. allowed the appeal from the costs award. Can costs be awarded in criminal proceedings in one province as a remedy for a breach of the Charter by police in another province. Are costs against the Crown available as a remedy under s. 24(1) in the absence of misconduct by Crown counsel.
Her Majesty the Queen v. Rickey Ciarniello (Ont. C.A. , August 29, 2006)(31694) "with costs."
TAX: THE “QUEBEC SHUFFLE”
Canada collected provincial income taxes for all provinces except Quebec under Tax Collection Agreements. The C.C.R.A. is responsible for implementing “agreements” to administer a tax that are made between Canada and the provinces. In 1995, General Distributors Limited, a wholly owned subsidiary of Gendis Inc., transferred shares of another company and a non-competition agreement to a wholly-owned subsidiary incorporated in Quebec in exchange for shares of the subsidiary. Under s. 85 of the Income Tax Act, General Distributors Limited elected the proceeds of the disposition to be the same as the cost of the transferred assets thus making the capital gains taxable to the subsidiary. Under s. 518 of the Quebec Taxation Act, the subsidiary elected the fair market value of the transferred assets to be its proceeds of the disposition for purposes of provincial income tax. The subsidiary paid federal income tax on the capital gains but avoided provincial income tax. This tax avoidance scheme was commonly known as the "Quebec shuffle". To avoid the tax avoidance effect of the Quebec shuffle, Manitoba amended its Income Tax Act . It added a general anti-avoidance rule and a tax avoidance rule applicable to all dispositions occurring after 1991 (ss. 53.1 and 53.2). General Distributors Limited was reassessed and a taxable capital gain of $106,547,920 was added to its income. Gendis, General Distributors Limited’s successor by way of an amalgamation, was assessed a tax liability of $18,113,146 plus interest of $10,247,431.
Gendis Inc. v. Attorney General of Canada, Minister of National Revenue and The Government of Manitoba (Man. C.A., June 6, 2006)(31595) "The applications for an extension of time to file and serve the Attorney General of Canada’s response and the Applicant’s reply are granted and the application for leave to appeal...is dismissed with costs."
CRIMINAL LAW: SENTENCING
The Applicant was released on parole from the Saskatchewan Penitentiary in Prince Albert, after having served four years and eight months of an aggregate nine-year sentence that he received for theft, forgery and breach of copyright convictions in Alberta and British Columbia . Soon thereafter, he was arrested by the parole authorities, when the fact of his using an assumed name and setting up a business venture dealing with many thousands of dollars came to their attention. The Parole Board revoked his parole with the result that he served an additional 30 months for breach of parole conditions. The Applicant was also then charged with 28 counts involving fraud, forgery and false pretences. After extensive negotiations with the Crown, the Applicant pled guilty to four representative charges for which he was sentenced to four years in prison. The C.A. confirmed the sentence.
Nicholas Yvon Bonamy v. Her Majesty the Queen (Sask. C.A., September 21, 2006)(31742) "The application for an extension of time is granted and the application for leave to appeal...is dismissed."
EMPLOYMENT LAW: “WALLACE” DAMAGES
The Applicant worked for the Respondent in its Halifax base for two and a half years. While on vacation her job was “posted”, but she was promised another one. Later, while in Vancouver she was asked by the president of the Respondent how things were going at the Halifax base. She said ‘basically well’ but that some customers had said “there was a lack of competency and leadership”. Her response was conveyed to the Halifax base manager, who said he didn’t think he could trust her or work with her anymore, and dismissed her. She was terminated by the Respondent, without cause, with over two and one half months’ notice. The Respondent failed to provide a record of employment within five days as statutorily required, delaying her claim for benefits, and did not provide her with a letter of reference. She brought an action in damages for wrongful dismissal alleging breaches of the duty of good faith and fair dealing. The Trial Court (by jury) awarded her 4 months’ pay in lieu of notice, and an additional 48 months’ extended notice due to the manner of dismissal. The N.S.C.A. allowed the appeal and cross-appeal: the Applicant received an amount equal to 9 months’ pay for extended notice, without deducting amounts earned during that period.
Wendy Jessen v. CHC Helicopters International Inc. (N.S. C.A., July 11, 2006)(31650) "with costs."
PHARMACEUTICALS: VALIDITY OF PATENT
The Applicants, a brand name pharmaceutical company, applied for an order prohibiting the Minister of Health from issuing a notice of compliance (“NOC”) to the Respondent, Ratiopharm, for Ratiopharm’s clarithromycin 250 mg or 500 mg tablets until after the expiry of six patents owned by Abbott. Abbott manufactured a drug called Biaxin Bid, in which the active medicinal ingredient is clarithromycin, an antibiotic used in the treatment of upper respiratory infections. Abbott marketed its Biaxin Bid in 250 mg and 500 mg tablets pursuant to an NOC issued by the Minister. Ratiopharm applied for a NOC to market its own version of clarithromycin, based on a comparison of its product with Biaxin Bid. Abbott did not have a patent for clarithromycin, but had patents listed for Biaxin Bid for three forms of clarithromycin, which it has named Form 0, Form I and Form II. Ratiopharm’s proposed clarithromycin product contained Form II. However, Form 0 is inevitably produced in the process of making both clarithromycin Form I and Form II, but is so unstable that if nothing is done to stabilize it, it quickly becomes a different form of clarithromycin. It was not identified as a unique substance until it was stabilized by Abbott, as disclosed in its 274 patent, which expires in 2017. In its notice of allegation, Ratiopharm alleged that its product was non-infringing because clarithromycin Form 0 can only be asserted against the final product produced by Ratiopharm, which was Form II, and not against an intermediate product used by the second person. It also alleged that the 274 patent was invalid for anticipation as it was disclosed in a prior patent, such that ‘a person skilled in the art had all of the information needed to produce the claimed invention - Form 0 - without the exercise of any inventive skill’. The Federal Court Trial Division dismissed the application for an order prohibiting the Minister of Health from issuing an NOC to the Respondent, on the ground that the allegation of non-infringement was justified. The Federal C.A. dismissed the appeal on the ground that 274 patent was invalid for anticipation.
Abbott Laboratories and Abbott Laboratories Limited v. The Minister of Health and Ratiopharm, a division of Ratiopharm Inc. (Fed. C.A., May 18, 2006)(31578) "with costs to the Respondent Ratiopharm Inc."
TORTS: DUTY OF CARE
Sara Burgess was seriously injured when she was hit by a train at an urban railway crossing frequently used by pedestrians. At the crossing, two sets of railway tracks cross a city street. Sara Burgess, a 13 year-old at the time of the accident, approached the crossing on her bicycle along a concrete sidewalk and then continued along a dirt path which led her to the crossing. She dismounted and waited for a train to pass. She entered the railway crossing after the train had passed not knowing another train was approaching the crossing. She was hit and suffered catastrophic permanent injuries. The plaintiffs filed a Statement of Claim that included a claim against Her Majesty the Queen in the Right of Canada represented by the Minister of Transport. The Minister of Transport brought a motion to strike the claims against the Crown. The Motions Court judge struck portions of the Statement of Claim alleging a cause of action against her Majesty the Queen. The Ontario C.A. dismissed the appeal. What is the extent of Transport Canada’s private law duty of care to persons injured in modes of transport it regulates, and what is the test to determine proximity in negligence actions.
Sara Burgess, et al. v. Canadian National Railway Company, et al. (Ont. C.A., August 31, 2006)(31698) "with costs to the Respondent Her Majesty the Queen in Right of Canada represented by the Minister of Transport."
CRIMINAL LAW: EXTRADITION
The Applicant admitted having committed a series of fraud offences against elderly U.S. citizens between 1995 and 2001 from call centres located in Montreal and Laval. On November 21, 2000, charges of fraud, money laundering and illegal financial transactions were filed in the U.S. against several individuals, including the Applicant, for acts of fraud committed between October 1998 and September 1999. A request for the extradition of the Applicant was made to Canadian authorities on September 7, 2001, and granted on September 1, 2004. On October 31, 2001, charges of conspiracy and fraud were filed in Canada for similar acts committed between October 2000 and February 2001. The Applicant pleaded guilty to these charges in May 2003. The Court of Quebec sentenced the Applicant to four years in prison. To avoid extradition to the U.S., the Applicant asked the judge to take into consideration the charges pending against him in the U.S. for related acts. The judge declined to take the charges filed outside Canada into account. The Quebec C.A. dismissed the appeal.
Vasilios Kolitsidas v. Her Majesty the Queen (Que. C.A., August 26, 2005)(31121)
CRIMINAL LAW: EXTRADITION
Same summary as above.
Vasilios Kolitsidas v. Minister of Justice of Canada (Que. C.A., August 26, 2005)(31122)
FAMILY LAW: CUSTODY
A teenager’s divorced parents had joint custody of him. A series of incidents led the boy to take up residence with a third party. The parents filed a habeas corpus motion against the third party when their son was 16 years old. The Quebec Superior Court issues a writ of habeas corpus to the Applicant parents against their son’s host. The Quebec C.A. allowed the appeal and quashed habeas corpus. Did the C.A. improperly emancipate a minor child and deprive parents of their parental authority by giving custody of the minor to a third party who had never claimed it.
L.L. and R.L. v. S.P.L. and P.S. (Que. C.A., August 18, 2006)(31675) "with costs to the Respondent S.P.L."
LEAVES TO APPEAL DISMISSED
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The Supreme Court of Canada held (unanimously) that the appeal is allowed, the Order of the C.A. is set aside, and the trial judgment is restored, with costs throughout.
This is a significant decision in the Torts area, dealing with duty of care, forseeability, and causation. In comparison to many other decisions of the Supreme Court, it is (happily) relatively brief (at 11 pages). As a courtesy to readers interested in this particular area, the complete judgment is below, written by Chief Justice McLachlin:
“This case involves a tragic injury that befell a young man, Mr. Hanke, when a water hose was placed into the gasoline tank of an ice-resurfacing machine rather than the water tank. When hot water overfilled the gasoline tank, vaporized gasoline was released into the air. It was ignited by an overhead heater, causing an explosion and fire. Mr. Hanke, who was employed by the City of Edmonton to run the ice-resurfacing machine and look after the ice-rink, was badly burned.
Mr. Hanke sued the manufacturer and distributor of the ice-resurfacing machine for damages, alleging design defects. He contended that the gasoline tank and the water tank were similar in appearance and placed close together on the machine, making it easy to confuse the two.
After a lengthy trial, the trial judge dismissed Mr. Hanke’s action ((2003), 333 A.R. 371, 2003 ABQB 616). He found that Mr. Hanke had not discharged the plaintiff’s burden of establishing that the accident was caused by the negligence of the manufacturer or distributor. First, he had not established that it was reasonably foreseeable that an operator of the ice-resurfacing machine would mistake the gas tank and the hot water tank. Second, he had not shown that the defendants caused the accident. The trial judge concluded that the accident had been caused by Mr. Hanke’s decision to turn the water on when he knew, or should have known, that the water hose was in the gasoline tank, knowing full well, by his own admission, the difference between the two tanks. He found as a fact that Mr. Hanke was not confused by the placement and character of the tanks, and consequently that this had not caused the accident.
On appeal, the judgment was set aside and a new trial ordered ((2005), 53 Alta. L.R. (4th) 219, 2005 ABCA 383). The Court of Appeal concluded that the trial judge had erred in both his foreseeability and causation analyses. The trial judge’s conclusion on foreseeability, the court found, was vitiated by a number of errors, namely: failure to give ‘adequate analytical emphasis’ to certain evidence concerning the placement and marking of the tanks and other workers who had made the same mistake (para. 20); and failure to consider policy factors in determining foreseeability (para. 21). On causation, the Court of Appeal held that the trial judge had erred by failing to consider the ‘comparative blameworthiness’ of the plaintiff and the defendants (paras. 15-16), and in applying a ‘but for’ test instead of a material contribution test (paras. 12-14).
The two issues that divided the Alberta courts — foreseeability and causation — dominate the appeal before us. I will deal with each in turn.
A. Foreseeability
Liability for negligence requires breach of a duty of care arising from a reasonably foreseeable risk of harm to one person, created by the act or omission of another: Jordan House Ltd. v. Menow, [1974] S.C.R. 239, at p. 247, per Laskin J. (as he then was). By enforcing reasonable standards of conduct, so as to prevent the creation of reasonably foreseeable risks of harm, tort law serves as a disincentive to risk-creating behaviour: Stewart v. Pettie,[1995] 1 S.C.R. 131, at para. 50, per Major J. The major elements of a tort action — duty, breach causing injury and cause — reflect ‘the principle of moral wrongdoing which is the basis of the negligence law’: L. Klar,‘Downsizing Torts’,in N. J. Mullany and A. M. Linden, eds., Torts Tomorrow: A Tribute to John Fleming (1998), 305, at p. 307.
The trial judge found that it was not reasonably foreseeable that an operator of the ice-resurfacing machine at issue would mistake the gas tank and the hot water tank, and thus place (or allow to remain) a water hose in the gas tank, thereby generating vapourized gasoline that might be ignited by an open flame, leading to an explosion and fire. The trial judge based this conclusion on the evidence, including the different size of the two tanks (one was much taller than the other), and on the fact (as found by him) that the gas tank had a label on it that said ‘Gasoline Only’. He emphasized Mr. Hanke’s admission that he knew the difference between the two tanks, and found that he was not confused between them.
The Court of Appeal’s first criticism on the foreseeability issue was that the trial judge failed to give sufficient ‘analytical emphasis’ to various aspects of the plaintiff’s evidence. It is true that, having found that the accident was due to operator error, the trial judge stated, ‘[t]hus, in this case I do not get to the point of reviewing alleged design error or failure to warn’ (para. 65). However, he went on immediately to review all the design errors alleged by the plaintiff and to state why he rejected the allegations (para. 65). He dealt with the allegation of the similar caps, the location of the hot water tank adjacent to the gas tank, the alleged similarity between the two tanks and the issue of warning signs, disposing of each one in turn.
The plaintiff submits that the trial judge discounted the evidence of expert witnesses called by the plaintiff on the design of gas delivery systems and the behaviour of workers. It is true that the trial judge placed no reliance on these witnesses. However, a trial judge is not obliged to consider the opinions of expert witnesses if he can arrive at the necessary conclusions on issues of fact and responsibility without doing so: R. v. Mohan, [1994] 2 S.C.R. 9, at pp. 23-24.
The plaintiff also submits that the trial judge should have placed more weight on the evidence of two other workers who said they had made similar mistakes in the past, while operating similarly configured machines. The trial judge discounted this evidence on the basis of his finding that in this case there had been no confusion. It is said that this was wrong because the evidence on the absence of confusion was far from conclusive. However, a trial judge is not obliged to accept all of the evidence. What is essential is that there be evidence to support the findings of fact he or she makes. The Court of Appeal can interfere with findings of fact only if the trial judge has made a palpable and overriding error with respect to them: Housen v. Nikolaisen, [2002] 2 S.C.R. 235, 2002 SCC 33, at para. 10. There was evidence that supported the trial judge’s finding that Mr. Hanke was not confused, notably his own admission. The trial judge’s finding of no confusion therefore cannot be displaced.
The Court of Appeal’s second criticism of the trial judge’s rejection of reasonable foreseeability was that the trial judge failed to consider policy matters, namely the seriousness of the injury and the relative financial positions of the parties. The Court of Appeal erred in suggesting that these matters are relevant to foreseeability. Foreseeability depends on what a reasonable person would anticipate, not on the seriousness of the plaintiff’s injuries (as in this case) or the depth of the defendant’s pockets: Haida Nation v. British Columbia (Minister of Forests) , [2004] 3 S.C.R. 511, 2004 SCC 73, at para. 55.
I conclude that, while the Court of Appeal would have preferred a different approach to foreseeability, no error of law or palpable and overriding error of fact or mixed fact and law has been established in the trial judge’s approach or conclusion. The Court of Appeal erred in interfering on this ground.
B. Causation
The trial judge stated that ‘[t]he onus is on the Plaintiff to establish that the damage was caused by the negligence of one or both of the Defendants to some degree’ (para. 10). He also said: ‘I must find causation against these defendants before considering contribution’ (para. 46). He went on to conclude: ‘The Plaintiff has failed to establish that the injuries were caused by negligent design ... That being the case, it is not necessary for this Court to consider the apportionment of fault under the rules of contribution ...’ (para. 58).
The trial judge based these conclusions on the evidence. He emphasized Mr. Hanke’s admission that ‘when he looked at the unit from behind he knew precisely which was the water tank and which was the gasoline tank’ (para. 41), as well as his admission that ‘he was fully familiar with the fact that hot water should not be introduced into the gasoline tank’ (para. 42). He noted that the caps on the two tanks as designed and delivered had been different, and had been replaced by similar caps by the City. He also noted the absence of evidence from Mr. Binette, who had prepped the machine before Mr. Hanke’s arrival. Although he stated that he did not get to the point of ‘reviewing alleged design error or failure to warn’, as noted above (para. 8), he also went on to consider the alleged design errors, disposing of each in turn (para. 65). He concluded that ‘there is no evidence that would show to the balance of probabilities that this event was caused by the defendants’ (para. 54).
The Court of Appeal stated that the trial judge had erred in failing to conduct a proper contributory negligence analysis and thus in not considering the comparative blameworthiness of the plaintiff and the defendants (paras. 15-16). The Court of Appeal also found that the trial judge erred in applying a ‘but for’ test for causation instead of a material contribution test (paras. 12-14).
1. Comparative Blameworthiness
The appellants argue that the Court of Appeal erred in suggesting that ‘comparative blameworthiness’ is a necessary component of the causation analysis. The suggestion attributed to the Court of Appeal is that a court must approach causation not simply by asking whether the defendant’s negligent act caused the loss, but by looking globally at all possible causes.
It is true that the trial judgment contains some passages that suggest that the carelessness of Mr. Hanke automatically absolves the respondent manufacturer and distributor of liability. That is not the case. An example, put to us in oral argument, illustrates the point. If it is industry standard to design an iron with an automatic shut off switch, and an iron is manufactured without such a switch, the manufacturer of the iron is not absolved of liability merely because the plaintiff was careless in leaving the iron on, resulting in a fire and injuries to the plaintiff. However, I am satisfied that the trial judge found not only that Mr. Hanke’s carelessness was responsible for his injuries, but also that the alleged design defects were not responsible for Mr. Hanke’s injuries. For example, the trial judge noted that ‘the accident was caused by operator error and had nothing to do with the design or manufacture of the machine’ (para. 56). In light of this finding there was no need for the trial judge to engage in a contributory negligence analysis.
2. The Test for Causation
The Court of Appeal found, correctly, that the trial judge had applied a ‘but for’ test in determining causation, stating, ‘the thrust of the reasoning is that ‘but for’ the Appellant putting or leaving the hose in the gasoline tank, the explosion would not have occurred’ (para. 12). Referring to the observation in Athey v. Leonati , [1996] 3 S.C.R. 458, at para. 15, that the ‘but for’ test ‘is unworkable in some circumstances’, the Court of Appeal concluded that this was such a case and that the trial judge should have used a ‘material contribution’ test instead of the ‘but for’ test (para. 14).
The Court of Appeal erred in suggesting that, where there is more than one potential cause of an injury, the ‘material contribution’ test must be used. To accept this conclusion is to do away with the ‘but for’ test altogether, given that there is more than one potential cause in virtually all litigated cases of negligence. If the Court of Appeal’s reasons in this regard are endorsed, the only conclusion that could be drawn is that the default test for cause-in-fact is now the material contribution test. This is inconsistent with this Court’s judgments in Snell v. Farrell , [1990] 2 S.C.R. 311, Athey v. Leonati, at para. 14, Walker Estate v. York Finch General Hospital, [2001] 1 S.C.R. 647, 2001 SCC 23, at paras. 87-88, and Blackwater v. Plint, [2005] 3 S.C.R. 3, 2005 SCC 58, at para. 78.
Much judicial and academic ink has been spilled over the proper test for causation in cases of negligence. It is neither necessary nor helpful to catalogue the various debates. It suffices at this juncture to simply assert the general principles that emerge from the cases.
First, the basic test for determining causation remains the ‘but for’ test. This applies to multi-cause injuries. The plaintiff bears the burden of showing that ‘but for’ the negligent act or omission of each defendant, the injury would not have occurred. Having done this, contributory negligence may be apportioned, as permitted by statute.
This fundamental rule has never been displaced and remains the primary test for causation in negligence actions. As stated in Athey v. Leonati, at para. 14, per Major J., ‘[t]he general, but not conclusive, test for causation is the ‘but for’ test, which requires the plaintiff to show that the injury would not have occurred but for the negligence of the defendant.’ Similarly, as I noted in Blackwater v. Plint , at para. 78, ‘[t]he rules of causation consider generally whether ‘but for’ the defendant’s acts, the plaintiff’s damages would have been incurred on a balance of probabilities.’
The ‘but for’ test recognizes that compensation for negligent conduct should only be made ‘where a substantial connection between the injury and defendant’s conduct’ is present. It ensures that a defendant will not be held liable for the plaintiff’s injuries where they ‘may very well be due to factors unconnected to the defendant and not the fault of anyone’: Snell v. Farrell, at p. 327, per Sopinka J.
However, in special circumstances, the law has recognized exceptions to the basic ‘but for’ test, and applied a ‘material contribution’ test. Broadly speaking, the cases in which the ‘material contribution’ test is properly applied involve two requirements.
First, it must be impossible for the plaintiff to prove that the defendant’s negligence caused the plaintiff’s injury using the ‘but for’ test. The impossibility must be due to factors that are outside of the plaintiff’s control; for example, current limits of scientific knowledge. Second, it must be clear that the defendant breached a duty of care owed to the plaintiff, thereby exposing the plaintiff to an unreasonable risk of injury, and the plaintiff must have suffered that form of injury. In other words, the plaintiff’s injury must fall within the ambit of the risk created by the defendant’s breach. In those exceptional cases where these two requirements are satisfied, liability may be imposed, even though the ‘but for’ test is not satisfied, because it would offend basic notions of fairness and justice to deny liability by applying a ‘but for’ approach.
These two requirements are helpful in defining the situations in which an exception to the ‘but for’ approach ought to be permitted. Without dealing exhaustively with the jurisprudence, a few examples may assist in demonstrating the twin principles just asserted.
One situation requiring an exception to the ‘but for’ test is the situation where it is impossible to say which of two tortious sources caused the injury, as where two shots are carelessly fired at the victim, but it is impossible to say which shot injured him: Cook v. Lewis, [1951] S.C.R. 830. Provided that it is established that each of the defendants carelessly or negligently created an unreasonable risk of that type of injury that the plaintiff in fact suffered (i.e. carelessly or negligently fired a shot that could have caused the injury), a material contribution test may be appropriately applied.
A second situation requiring an exception to the ‘but for’ test may be where it is impossible to prove what a particular person in the causal chain would have done had the defendant not committed a negligent act or omission, thus breaking the ‘but for’ chain of causation. For example, although there was no need to rely on the ‘material contribution’ test in Walker Estate v. York Finch Hospital , this Court indicated that it could be used where it was impossible to prove that the donor whose tainted blood infected the plaintiff would not have given blood if the defendant had properly warned him against donating blood. Once again, the impossibility of establishing causation and the element of injury-related risk created by the defendant are central.
In this case, the Court of Appeal erred in failing to recognize that the basic test for causation remains the ‘but for’ test. It further erred in applying the material contribution test in circumstances where its use was neither necessary nor justified.
C. Conclusion
I would allow the appeal, set aside the order of the Court of Appeal and restore the trial judgment, with costs throughout.
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